Security Company Loses Stadium Contract and License Over Hiring Practices

by Michael Nossaman

Brimming with enthusiasm and anticipation of his team taking on their archrival Green Bay Packers, a Minnesota Vikings fan approached a stadium entry gate. It was the first 2016 home game in the new $1.2 billion U.S. Bank Stadium. Entering a stadium security checkpoint is not normally a noteworthy event, except this time the fan recognized the man in the Monterrey Security uniform who was checking tickets and bags, and took his picture.

The Minnesota Sports Facility Authority (MSFA), a government sponsored agency, had awarded the three-year, multi-million dollar U.S. Bank Stadium security contract to Monterrey Security through a competitive bid process. It was another premier showcase client for the Chicago based minority family-owned company. Monterrey has several high-profile sports clients including the Chicago Bears, and over 3,500 employees.

Monterrey then hired Don Banham, a retired Minneapolis police officer, to oversee day-to-day security operations. Banham had the right experience, having previously supervised security at the Metrodome, where the Vikings had played before the new stadium was built.

On game days, Monterrey provided a range of security services including gate duty, visitor assistance, and on-field personnel. This required about 400-500 officers to cover as many as 66,000 fans.

Rickey Eugene Pouncil

The Vikings fan sent the picture of the security officer to a police officer friend at a local department. It later became public that the Monterrey officer on duty that day was Rickey Eugene Pouncil, a convicted felon. Minnesota law generally prohibits hiring felons as security guards.

During the Vikings-Chicago Bears game on January 1, 2017, two people rappelled from the rafters of the stadium and released a 40-foot banner protesting the Dakota Pipeline project. An investigation concluded that the protesters had entered the stadium with game tickets and concealed the banner and rappelling ropes under their winter clothing.

According to Ruben Rosario of Pioneer Press, by mid-2017 Banham had had enough. He went to the Private Detective and Protective Services Agent Board (PDPSA) – the state security licensing authority – with a list of allegations of violations by Monterrey. He accused the company of improper hiring, vetting, and training of hundreds of employees. “I blew the whistle,” Banham said. “I reported wrongdoings going on at Monterrey.”

Banham’s complaints and the security incidents triggered two investigations; one by the licensing board; another by the MSFA and stadium management company SMG.

The investigations ended in late September and reached similar conclusions about Monterrey’s practices and performance.

Rick Hodsdon, PDPSA Chair, said that Monterrey had failed to train and license “hundreds and hundreds and hundreds of individuals performing security functions” required by state law.

The PDPSA voted 4-0 not to renew Monterrey’s license. The company can no longer do business in Minnesota.

Mike Velick, MSFA Chair, said, “”Three major things: they were not in compliance with state regulations and rules of the licensing board. Second they had unlicensed personnel working. Three, they had individuals who would normally be disqualified from working. Also billing irregularities.”

MSFA and SMG cancelled Monterrey’s contract.

U.S. Bank Stadium General Manager Patrick Talty added, “Specifically, the employment screenings, background checks, they failed to properly train employees in accordance with state law and didn’t keep records with those.”

“They ignored state requirements for the private security industry up here and employed people with disqualifying criminal histories, and didn’t submit people for background checks and used ambiguous event titles as justification for doing so.”

“…ambiguous event titles,” was a reference to the allegation that Monterrey classified duties some of its personnel performed as non-security functions. Using titles other than “security” would enable Monterrey to circumvent state security licensing and training requirements.

There are published reports that the FBI is investigating Monterrey for possible fraud related to records falsification and improper billing practices. Monterrey headquarters in Illinois and was paid $4.1 million in Minnesota.

How did this plum contract unravel and what are the consequences?

A chance encounter with an unqualified security officer, a very public protest demonstration, and a disgusted employee with inside information was a toxic brew of compelling facts that put Monterrey under a microscope.

As a result, the company has lost a high-value contract, may be in legal jeopardy, and has suffered grievous reputation damage. The FBI may write the last act of this tragic play.

The stature, reputation, and effectiveness of the security industry are damaged. Good security depends on the cooperation and compliance of the people protected. The foundation of that is the peoples’ faith and trust that their protectors are competent and qualified. When that bond is broken, security fails.

On game days in Minnesota, more than 66,000 people willingly accept inconveniences and abide by rules with the understanding that in return, they are safe, that someone is protecting them; a ritual performed every day and everywhere in the world where people gather for work or play. A cavalier attitude about rules and regulations in exchange for quick profit is a formula for a much more costly outcome.

Takeaways

Hire the right peopleUpright and breathing is not enough. Get the right people on the bus and in the right seats. A review of employee comments about Monterrey posted on Glassdoor.com revealed that some employees were group hired, and not personally interviewed. Background checks, vetting, and proper interviews are time consuming and costly, but the alternative is more.

MeritocracyCurrent and past Monterrey employees also complained on Glassdoor.com that better assignments and promotions went to favorites and friends. Favoritism is a disincentive that kills culture. It should not be tolerated at any level.

TrainingSome Monterrey employees reported that their training consisted entirely of watching short videos. Others reported no training at all: applied, hired, dispatched to job site. Learning new skills is a powerful incentive, especially for younger people. Entry level is more acceptable if there is a visible and viable path upward.

Employee Record KeepingHonesty is a virtue. If you cannot trust your security provider to tell the truth about something as simple as who is on the job, would you trust them to provide security?

ComplianceThe shortest route to new rules, regulations, and laws, is to ignore and break existing ones. It is also the nearest exit to the industry. Is there a plan for what you will do when you are ousted from this business?

Billing and PricingIf the price charged does not cover the cost of doing all of the above, and a profit, then the business model is wrong. Cheating and shortcuts are dishonest, and dive-to-the-bottom competitive pricing are self-defeating and counter-productive. Trained and incentivized people produce better service quality that commands premium price. Excel at one niche before taking on another. Plan growth sensibly, volume alone will not support a defective model.